San Diego  A key San Diego panel approved incentive packages this week that would allow local breweries Ballast Point and Alesmith to move into much larger production facilities and add new amenities.

The deals, which were approved by the City Council’s Economic Development and Intergovernmental Relations Committee, would make San Diego home to three of the eight largest brewing plants in the state.

Members of the committee said the expansions would bolster San Diego’s reputation as the craft beer capital of California.

Approval from the City Council later this year is still needed for both of the deals, which would reimburse the breweries for about $150,000 each in development fees.

City officials estimated it would take about three years for full reimbursement, but said the timing could vary because it would be based on how much property and sales tax revenue the breweries generate.

Members of the committee said the incentive packages were warranted because breweries create local jobs and boost tourism, and because the companies plan to expand into large empty buildings in Mira Mesa that have been in danger of becoming blight.

In addition, they said the incentives would keep both breweries from relocating outside the city limits or possibly even outside the region.

“Craft beer represents a growth industry — very successful small and medium-sized companies that are providing good, well-paying jobs,” Councilman Mark Kersey said. “We need to be looking for other niche industries like this and supporting them with similar agreements.”

The deals aren’t financially risky for the city because the breweries don’t get reimbursed unless they generate tax revenue.

City officials said such deals could become the new model for economic incentives, suggesting they would serve a similar function to redevelopment revenue, which the state eliminated two years ago.

Each brewery is estimated to produce about $50,000 per year in total tax revenue for the city after the reminbursements are complete.

Ballast Point, now located in Scripps Ranch, would expand in size from 23,000 to 125,000 square feet, add a full-service restaurant, an outdoor patio, a tasting room and a gift shop.

Alesmith, which would relocate within Mira Mesa, would expand from 20,000 to 106,000 square feet, add two tasting rooms and a cheese production facility.

Ballast Point would have the largest beer production facility in the county and the sixth largest in the state, and Alesmith would be No. 8 in California. Stone Brewing Co. in Escondido, the largest facility in the county at 110,000 square feet, would rank second in the county and seventh in the state after the expansions.

San Diego has 22 breweries and 19 brew pubs with three other breweries under construction — the most of any city in the state.

A recent study by National University said the industry has a $300 million annual economic impact on the region, including increased tourism.